Technology companies such as Stripe, FactSet and thousands of others make certain of their offerings available via APIs. Stripe was founded as an “API” company, simplifying the back-end infrastructure of the payments industry. If your company is new to making various data elements and tools available to customers and partners via APIs, understanding the Market Opportunity and defining your firm’s near-term operating goals are key project elements that will enable you to measure project success.
Management consultants, private equity firms, venture capitalists, institutional investors and everyday businesses are familiar with the concept of Market Opportunity or sizing a particular market. Let’s use Bloomberg as a quick example. Bloomberg has Fintech product offerings, data feeds and related services largely consumed by fixed income and equity institutional investors. Let’s assume Bloomberg made nothing available via APIs but wanted to explore an API strategy. Where to start?
- First, given that the global fixed income market dwarfs the equity market and given that Bloomberg is known for its fixed income data and products, the fixed income side of Bloomberg’s product portfolio would be a logical place to kick-off the company’s initial API project.
- Second, define your near-term primary, secondary and tertiary objectives.
- If Bloomberg’s near-term primary objective for this initial, hypothetical API project is to maximize Revenue and EBITDA, it would be logical for Bloomberg to make elements of its largest product or service (as measured by Revenue and EBITDA), available to customers via APIs. However, no project is one dimensional with a singular objective. Time to market, operational complexity, technical complexity, resources, expenses, customer satisfaction and operational risks need to be defined, quantified and prioritized. When new to APIs as in this hypothetical example, it may make sense to first pursue a small project and gain the learnings associated with that experience. For example, what are the trends in terms of how customers ingest data via your APIs? When do they run the most queries? Which customers are running them? What questions do they have about your technical documentation? Is your API fee structure optimal or does it need to be tweaked? Is the free pricing tier too generous? These are some of the operational questions that may be relevant.